TMI Blog2006 (11) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and there is no appeal by the revenue. 2.1 It was found on stock verification and sample weighment of ingots that there was excess stock of 1088 Nos. of zinc ingots weighing 26117 kgs., which were seized under a panchnama. Show cause notice was issued for confiscation of the said excess stock, with a demand of duty and proposal to impose penalty. 2.2 In the reply dated 16-1-2001, the appellant company contended that by clerical mistake they had not entered zinc ingots in the RG-1 register. The production details of zinc ingots 26117 kgs. being the weight of 1088 Nos. of zinc ingots, were given, showing that these were produced from 1-3-2000 to 11-3-2000. According to the assessee, the clerical mistake by which the goods were not entered into RG-1 register, was only technical in nature and that the stock found in the factory premises due to change in quality which was to be tested. It was contended that these zinc ingots were required to be tested for their purity and percentage before dispatch to customers and that they were not in a finished condition and would have been re-melted if impurities were more than the required percentage. It was also urged that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating authority, the appellate Commissioner had set aside the confiscation of the goods and imposed a penalty of only Rs. 1,000/- on the appellant company for not properly maintaining RG-1 register. The demand confirmed and other penalties were all set aside. This order was challenged before the Tribunal and the Tribunal by order dated 12-7-2004 remanded the case to the Commissioner (Appeals) for a fresh decision. By that order, it was observed that the Commissioner (Appeals) had overlooked the authenticity of the panchnama giving the details of the goods found in excess, which was attested by Mr. Rajeev Sharma and other witnesses and that he had wrongly accepted the plea of the assessee that some of the goods did not reach the stage of entry in the RG-1 register, without assigning any reason; whereas, the adjudicating authority had rejected this plea by recording detailed reasons. It was also noted that the Commissioner (Appeals) had not referred to the statement of the authorized signatory of the assessee. 4. After the remand, the Commissioner (Appeals) has passed the impugned order in which it has been held that no explanation was given regarding excess stock of finished pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no allegation of intent to evade duty or evidence to show that the alleged excess stock was to be removed without payment of duty and reduced the penalty, he could not have confiscated the goods and imposed such fine. He also submitted that in the earlier order dated 17-11-2003, which was set aside by the Tribunal, it was held that as zinc ingots were to be tested for their zinc content and there was no evidence to show that the appellant had attempted to remove the goods clandestinely and the benefit of doubt was extended to the appellant. It was further contended that having regard to the allegation contained in the show cause notice that there was breach of Rules 53, 173G and 226, clause (d) of Rule 173Q(1) required existence of intention to evade duty before any confiscation order could be made. He submitted that mere non entry in the RG-1 register which could be due to innocent mistake, could not be a ground for confiscating the goods in the absence of any intention to evade duty as the requisite mens rea. He contended that there was no allegation that the goods were attempted to be removed and they were found very much in the stock and were not entered in the register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not entered in the RG-1 register, because they were required to be tested for purity. The learned authorized representative for the department supported the reasoning and findings of the Commissioner (Appeals) in the impugned order and relied upon the decision of the Bombay High Court in Kirloskar Brothers (supra), in which it was laiddown that clauses (a), (b) and (c) of Rule 173Q( 1) did not depend upon mens rea. 7. In the show cause notice, which was issued on 28-6-2000. there was a clear mention of the fact that on verification of stock of raw material, and the comparison showed discrepancy in the stock entered in the RG-1 register of 3 1603 kgs. as against the actual physical stock of 59880 kgs. It was alleged that if during physical verification, 2495 pieces of zinc ingots were counted, out of which 90 pieces of zinc ingots were produced on that day itself i.e. on 15-3-2000. The authorized signatory of the appellant company had admitted the physical stock of zinc ingot of 57720 kgs. as against the balance quantity of 31603 kgs. recorded in the RG-1 register, but expressed his inability to explain such non-accountal in the RG-1 register. It was clearly alleged in the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, that the clauses (a), (b) and (c) of sub-rule (1) of Rule 173Q did not use the expression with intent to evade payment of duty , which was found in clause (d) thereof, and therefore, it can be prima facie assumed that the liability in terms of Rule 173Q(1) of sub-rule (a), (b) and (c) and did not depend upon mens rea. It was also held that the question whether one had an intention to evade excise duty is a question of fact. 8.1 Rule 173(l)(a) would be attracted when there is removal of excisable goods in contravention of any of the provisions of the said rules. To illustrate, if procedural requirement of Rule 52 56 is violated, the said rule would be attracted. Since there is no allegation of actual removal, clause (a) is obviously not attracted in the present case. Clause (b) of Rule 173Q(1) is attracted when the manufacturer does not account for any excisable goods manufactured, produced or stored by him. The expression does not account for occurring in clause (b) indicates a situation where the manufacturer is unable to explain the quantity of the excisable goods manufactured by him. The expression account for as per the Concise Oxford Dictionary means, serve as or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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